The COVID stock market crash of 2020: dates, percentage and recovery

Education only, not financial advice. Figures come from official sources, each with its date; past market moves do not predict future ones. How we work

The COVID stock market crash took the S&P 500 down 33.9% in 33 calendar days, from a record close of 3,386.15 on February 19, 2020 to 2,237.40 on March 23, 2020. It ended almost as fast as it began: the index closed above its old record on August 18, 2020, less than six months after the low.

The fall took 23 trading days. In that time US stock trading was halted market-wide four times by circuit breakers, and the Federal Reserve cut interest rates to near zero. Congress passed the CARES Act four days after the low: the Senate on March 25 and the House on March 27, when it was signed into law. This page sets out the dates and figures from official data, explains what the circuit breakers did, and shows how the 2020 drop compares with other stock market crashes.

When did the COVID stock market crash start and end?

The crash is usually dated from the S&P 500's record close on Wednesday, February 19, 2020 to its lowest close on Monday, March 23, 2020. Measured that way the index lost 33.9%, well past the 20% line that marks a bear market. The Dow Jones Industrial Average had peaked a week earlier, on February 12, 2020, at 29,551.42, and fell 37.1% to 18,591.93 on the same March 23 low.

The working group of US exchanges and FINRA that later studied the March 2020 trading halts for the SEC dates the start of the turbulence to Friday, February 21, 2020, when the S&P 500 fell 1.1% on rising COVID-19 concerns. The next Monday, February 24, it fell 3.4%. On February 27 it lost 4.4%, and on February 28 US equity markets traded 19.375 billion shares, which the group's report describes as the second most active volume day in history at the time.

A 10% drop from a high is usually called a market correction. The S&P 500 passed that mark within days of its peak and kept falling.

What happened day by day in March 2020?

March 2020 holds the three worst daily falls in the S&P 500 over the ten years of daily data that FRED publishes: March 16 (-12.0%), March 12 (-9.5%) and March 9 (-7.6%). It also holds two of the three best days in that data: March 24 (+9.4%) and March 13 (+9.3%). Very large rises in the middle of a falling market are common in crashes, and they did not mark the bottom here.

The weekend of March 7 and 8 explains the March 9 fall. According to the circuit breaker report, oil prices "collapsed" as Asian markets opened on Sunday evening (Eastern Time) after Saudi Arabia announced plans to raise output, with Brent crude dropping as much as 30%. S&P 500 futures hit their overnight limit-down level of 5% before US stocks opened.

On March 12 the report notes that global health authorities had just declared the outbreak a pandemic. On March 16, the first trading day after the Fed's Sunday rate cut, selling was heavy from the open, and the index fell further in the last 35 minutes of trading. After the close on March 18, the New York Stock Exchange said its trading floor would close from Monday, March 23. Trading continued electronically.

Why were circuit breakers triggered four times in March 2020?

Market-wide circuit breakers are rules shared by US stock exchanges that pause all trading when the S&P 500 falls a set amount from the previous day's close. There are three levels: 7% (Level 1), 13% (Level 2) and 20% (Level 3). A Level 1 or Level 2 fall between 9:30 a.m. and 3:25 p.m. halts trading for 15 minutes. A Level 3 fall halts trading for the rest of the day.

In March 2020 the Level 1 trigger was hit four times: on March 9, 12, 16 and 18. Each time trading stopped for 15 minutes and then reopened through auctions on the main exchanges. Three of the four halts came within the first five minutes of trading. On March 16 the 7% threshold was crossed at 9:30:01 a.m., before most S&P 500 stocks had even completed their opening auction. Level 2 and Level 3 were never reached.

The working group, which the SEC's Division of Trading and Markets asked to study the events, submitted its report on March 31, 2021. It concluded that the mechanism "worked as intended" and that the halts appear to have calmed volatility without causing harm. It found the 7%, 13% and 20% levels and the 15-minute halt length appropriate. The current rules use the S&P 500 as the reference index; the report also reviewed related limits in stock index futures.

How did the Federal Reserve respond?

The Fed moved in three steps over three weeks.

• March 3, 2020. In an unscheduled decision, the Federal Open Market Committee cut its target range for the federal funds rate by half a percentage point, to 1 to 1.25%. Its statement said the fundamentals of the US economy remained strong but that the coronavirus posed evolving risks to economic activity.
• March 15, 2020. On a Sunday, the FOMC cut the range again, to 0 to 0.25%. It said it would increase its holdings of Treasury securities by at least $500 billion and of agency mortgage-backed securities by at least $200 billion. These were large-scale asset purchases, often called quantitative easing (QE). The same day it announced changes to the discount window, bank capital and liquidity buffers, reserve requirements and dollar swap lines with other central banks.
• March 23, 2020. The Fed said it would buy Treasury and mortgage-backed securities "in the amounts needed" to support smooth market functioning, removing the earlier dollar limits. It also announced three new facilities to support credit to companies and households (the Primary and Secondary Market Corporate Credit Facilities and the Term Asset-Backed Securities Loan Facility), backed by $30 billion of Treasury equity and providing up to $300 billion in new financing.

The S&P 500's lowest close came on March 23, the day of that third announcement. The effective federal funds rate, which averaged 1.58% in February 2020, averaged 0.05% in April 2020 according to FRED data from the Fed.

What did Congress do?

The Coronavirus Aid, Relief, and Economic Security Act, known as the CARES Act, was passed by the Senate on March 25, 2020 and by the House on March 27, 2020, when it was signed into law, four days after the March 23 low. The Treasury describes it as providing fast and direct economic assistance for workers, families, small businesses and industries. The circuit breaker report also records that on March 17 the administration had indicated support for a stimulus plan with direct payments to individuals, and that the S&P 500 gained 6% that day.

The fiscal support mattered beyond the stock market. Household income held up while spending was restricted, and the US personal saving rate jumped from 7.5% in February 2020 to 31.8% in April 2020 (BEA data via FRED). That saving later fed into the demand that economists link to inflation after COVID.

How long did it take the stock market to recover?

The S&P 500 needed about five months from the low, and almost exactly six months from the old peak, to set a new record: it closed at 3,389.78 on August 18, 2020. The Dow took longer and first closed above its February 2020 peak on November 16, 2020.

The recovery ran ahead of the real economy. US unemployment was 14.8% in April 2020, and real GDP did not regain its late-2019 level until the first quarter of 2021 (BLS and BEA data via FRED). The COVID recession itself was short: the NBER dates it from February to April 2020, two months, the shortest US recession on record. Stock prices tend to reflect expectations about future profits and interest rates, which helps explain why the index recovered before jobs did. That is a description of what happened in 2020, not a rule that markets follow every time.

How does the 2020 crash compare with other crashes?

The 2020 crash was deep but short. Other falls in the same official data series took longer to reach bottom and far longer to recover.

The comparison mixes indexes because FRED holds only the last ten years of the S&P 500 and Dow, while the Nasdaq Composite goes back to 1971. Within those limits the pattern is clear. In the 2008 financial crisis the Nasdaq took 16 months to reach bottom and more than two years after that to recover. The dot-com bubble deflated over two and a half years, and the Nasdaq needed fifteen years to regain its 2000 peak. Around Black Monday in 1987 the Nasdaq fell about as far as the S&P 500 did in 2020, but took almost two years to recover. The 2020 fall came from an outside shock to the whole economy, met by fast and very large policy support, and both the fall and the rebound were compressed into months.

What did the 2020 crash leave behind?

The effective federal funds rate was still 0.20% in March 2022. The rebound in demand, the jump in household saving and the strain on global production set the stage for the price rises of 2021 and 2022, covered in our pages on inflation after COVID and the supply chain crisis. When the Fed raised rates to fight that inflation, the S&P 500 fell 25.4% in the 2022 bear market, a slower and longer decline than the one in 2020.

For readers asking what a crash like this means for their own savings, the answer depends on personal circumstances, and this site does not give investment advice. The SEC's Investor.gov in the US and MoneyHelper in the UK are neutral places to start.

Questions readers ask